German industry concerned at fallout from tax dodge scandal

( dpa )- Government and industrial leaders voiced concern Sunday at a burgeoning tax evasion scandal that threatens to engulf hundreds of prominent business people in Germany. Economics Minister Michael Glos called on German industry to introduce "a cleansing process" within its ranks amid reports that up to 900 wealthy Germans might be involved. "Our managers have to develop a sense of ethical behaviour. They need to be aware of their function as a model for society. If they don't our social market economy will be called into question," he told the newspaper Bild am Sonntag. The scandal has already led to the fall of one of Germany's most prominent businessmen, Deutsche Post chief executive Klaus Zumwinkel, who resigned Friday, a day after prosecutors linked him to a tax scam to the value of 1 million euros (1.5 million dollars) using foundations in the tax haven of Liechtenstein. The news magazine Der Spiegel said the scam came to light after the German BND intelligence network paid 5 million euros to an informant for confidential bank data from Liechtenstein. Liechtenstein's LGT bank group said last week that "sensitive documents" containing "several hundred" names had been stolen by an employee in 2002. It is believed the person passed on the information to German investigators. They informed prosecutors in the city of Bochum, who called for assistance from Dusseldorf and Cologne. The prosecutors spoke of "several hundred" German residents making use of foundations in the principality, "which have apparently been set up for the sole purpose of tax evasion." A spokesman for Finance Minister Peer Steinbrueck said the probe took in "numerous" prominent Germans, but declined to give numbers. "Managers and industrials bear a special responsibility," said Federation of German Industries president Juergen R Thumann. "Anyone who breaks the rules is acting against the interests of industry." "We will only support those who operate according to the principles of law, honour and conscience," Thumann told Bild am Sonntag. Der Spiegel said the scam might have deprived German authorities of up to 4 billion euros in taxes. Leader writers referred to "greed" and a "moral vacuum" at the top of German business. Liechtenstein Prime Minister Otmar Halser, who is due to discuss the issue with Chancellor Angela Merkel on Wednesday, told Bild am Sonntag the disclosures were "unpleasant" for the principality. "However, I don't expect any long-term damage to Liechtenstein as a financial centre," he said. Zumwinkel was taken away under police escort to the Bochum prosecutors office after police raids on his Cologne home and his office at Deutsche Post headquarters in Bonn, but released after posting a large bond as security. Zumwinkel, who had headed Deutsche Post since 1990, is credited with turning the loss-making state monopoly into a profitable private concern with a global reach and a staff of 520,000. At the end of last year, he drew negative publicity when he sold Deutsche Post shares for 4.7 million euros after the German parliament had passed imposed a minimum wage in the postal sector, undercutting the strategy of competitor companies entering the market.

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